LONDON, Aug 25 - European blue chips fell from multi-month highs in midsession trade on Monday, led downwards by volatile insurers and technology issues as an expected decline on Wall Street loomed. Volumes were razor thin as London's financial markets were closed for a public holiday. Some investors were nervous that valuations were on the high side after benchmark indexes had racked up gains of over 30 percent since mid-March. "The technology sector, for one, has risen so fast that valuations are looking a tad stretched," said Peter Nethe, a fund manager at Theodoor Gilissen Bankiers.
"However, sentiment remains buoyant as signs of a pick-up, particularly in the U.S. economy, should invigorate cyclical businesses such as advertisers." Among standout movers, Europe's largest chipmaker STMicroelectronics fell 2.4 percent on newspaper reports, confirmed by a union representative and a plant manager, that it would close its factory in the French city of Rennes, cutting almost 500 jobs. By 1049 GMT, the DJ European Stoxx 50 index <.STOXX50E> was down 1.01 percent at 2,567 points, while the broader pan-European FTSE Eurotop 300 <.FTEU3> shed 0.63 percent to 905 points. Volume was a paltry 271 million euros ($295.7 million), while falling issues outnumbered advancers by a ratio of over five to one. The FTSE Eurotop 300 benchmark closed at a fresh eight-and-a-half month high on Friday.
Around Europe, France's CAC-40 <.FCHI> fell one percent, Germany's DAX <.GDAXI> lost 1.23 percent and Zurich's Swiss Market Index <.SSMI> was 1.04 percent down.
TECHS FALL
The technology sector weakness was led by the world's top maker of mobile phones Nokia , which lost 1.6 percent, and Germany's Siemens , down 1.8 percent. Among leading European gainers, makers of anti-virus software and firewalls to protect computers from unauthorised attacks, rose sharply as the fast-spreading Sobig.F e-mail virus slowed on Sunday. Shares in Finnish IT security software maker F-Secure rose three percent, while Internet-based data security firm SSH Communications Security rose 15 percent. Financial stocks also came under pressure, with CS Group down 2.1 percent and ING slipping 1.8 percent. Shares in German postal and logistics group Deutsche Post tumbled two percent after HVB Group downgraded the group to "underperform" from "outperform", citing a recent strong run in the shares. U.S. equity futures were slightly lower, indicating Wall Street may fall when it opens for business. Investors will be watching for the release of U.S. macroeconomic data later in the day for further evidence of the health of the world's biggest economy. U.S. existing home sales in July are forecast at 5.9 million. The figure is due at 1400 GMT.//